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[August 15, 2014]
Electrolux Confirms Talks To Acquire GE Appliances
(dpa-AFX International Compact Via Acquire Media NewsEdge) FAIRFIELD (dpa-AFX) - Confirming media reports, Swedish home appliances company Electrolux AB (0MDT.L, ELUXY, ELUXF) on Thursday confirmed that it is in discussions on a possible acquisition of the home appliances business of diversified conglomerate General Electric Co. (GE).
However, Stockholm-based Electrolux, the No. 2 in U.S. sales of appliances, added that no agreement has been reached, and there can be no assurances that an agreement will be reached.
General Electric has revived its efforts to sell the century-old appliance business. It tried to sell the business in 2008 and had hired Goldman Sachs Group, Inc. (GS) to assist in the sale process. The sale of the business could reportedly fetch up to $2.5 billion.
However, it had to scrap the effort due to the lack of potential buyers amid the recession. The business sells home appliances such as refrigerators, air conditioners and washing machines and is the third largest by market share in the U.S.
Consumer development startup Quirky, Inc. is also reportedly looking for a tie up with private-equity firms to bid for a majority stake in the appliances business.
South Korea's LG Electronics Inc. and Samsung Electronics Co. (SSNLF) may also look to boost their footprint in the U.S. Other potential bidders include General Electric's Mexican partner Controladora Mabe SA and China's Haier Electronics Group.
Meanwhile, if Whirlpool Corp. (WHR), the largest appliance maker for the U.S. market, decides to bid, it could face antitrust concerns. Whirlpool agreed last week to buy a majority stake in Italian appliance maker Indesit Co. SpA (IDTCF) for 758 million euros, or $1.04 billion.
General Electric is currently in the process of divesting businesses that are non-core to its operations as CEO Jeffrey Immelt focuses on the growth of its industrial business. Immelt had earlier outlined plans to divest $4 billion of non-core assets in 2014.
As part of its focus on industrial business growth, General Electric agreed last month to acquire the energy assets of French conglomerate Alstom SA (ALSMY, AOMFF, ALS.L) for $17 billion, the largest acquisition in General Electric's history.
GE closed Thursday's regular trading session at $25.88, up $0.05 or 0.19% on a volume of 23.31 million shares.
Copyright RTT News/dpa-AFX
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